How To Access M&A Deals In ETFs

June 14, 2019

Another Way To Access M&A Deals

Now, say, that you want to access the Merck acquisition of Tilos Therapeutics. Tilos is a private company—there are no stocks of Tilos Therapeutics sitting in ETF portfolios. Because it’s a deal involving a private name, it will not land in the MNA portfolio.

The only way to play this deal would be through allocations to Merck stock. At ETF.com, we have a stock finder tool that allows you to find what ETFs hold any specific company you are looking for. Go to www.etf.com/etfanalytics/etf-stock-finder and type the ticker—in this case, MRK—into the search box.

 

 

You will find that Merck is in 243 different ETFs today. From a sector perspective, Merck is a health care company, so it’s unsurprising to see Merck stock in the Health Care Select Sector SPDR Fund (XLV). Merck represents about 6.5% of XLV’s portfolio weighting, which amounts to $1.1 billion worth of Merck stock at current prices.

 

 

On average, U.S. ETFs allocate only 1.39% to Merck in their portfolios, but you can also—in our tool—find that the First Trust Nasdaq Pharmaceuticals ETF (FTXH) has an 8.5% allocation to the company, the biggest portfolio weighting to this company in any ETF wrapper.

That allocation equates to slightly more than $500,000 worth of Merck stock—a fraction of the market value found in XLV—but the weighting is FTXH’s second largest single-stock allocation. That means movements in Merck stock prices would have a much bigger impact on the overall performance of FTXH than they would in XLV.

Merck stock may be included in portfolios you might not necessarily think of when you think of a pharmaceutical giant. For example, you will find Merck at above average levels in the iShares Edge MSCI U.S.A. Momentum Factor ETF (MTUM), where a 5% allocation has a market value of about $410 million.

Also In Quality & Dividend ETFs

If you are a quality-factor ETF investor, you will also find Merck in the Invesco S&P 500 Quality ETF (SPHQ), where the stock represents about 3.8% of the portfolio. And you can run into Merck if you are looking for dividend payers, too, in the Amplify CWP Enhanced Dividend Income ETF (DIVO), where Merck is a 5% allocation.

You can also easily find that, out of 243 ETFs investing in Merck today, 28 of them are actively managed, so you can also choose between passive and active bets on this stock through ETFs. Depending on how you feel about the announced M&A deal involving Merck, and whether you want to own more or trim exposure to that stock, it helps to know all of the ETFs where you might be allocated to this pharma name.

Contact Cinthia Murphy at [email protected]

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